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Poker Bill Passes Out of Committee -- Now What?

Poker Advocates Celebrate Rare, Significant Political Victory

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Poker legislation just got one step closer to passing.On Wednesday, the House Financial Services Committee passed Rep. Barney Frank’s poker-related legislation out of committee by a 41-22 vote.

The result was hailed by poker advocates as a historic vote in the battle to explicitly legalize and completely open up the markets for internet gaming. The last time an internet gaming bill went to the committee for a vote was in 2008, when the legislation failed to garner enough support by virtue of a 32-32 tie.

Many industry officials were quick to declare the passage of the bill out of committee as a major victory for the poker industry, and indeed the vote does represent a significant hurdle that has been overcome. However, for those people who expect the laws to change in a matter of days or weeks, they will likely be disappointed.

In a news article reporting the vote, the New York Times noted how the legislation was “far from becoming law” — citing the little time remaining on the legislative calendar before midterm elections, the fact that Senator Robert Menendez (D-NJ) had yet to hold a hearing on his equivalent legislation, and the Obama administration’s failure to identify its public position on the issue.

However, for an industry that has been focused on the House Financial Services Committee for so long, Wednesday’s vote could not have been more welcomed.

“The Committee’s bi-partisan vote to approve Chairman Frank’s legislation is nothing short of historic,” offered Michael Waxman, a spokesperson for the Safe and Secure Gambling Initiative.

Alfonse D’Amato, a former U.S. Senator and the chairman of the Poker Players Alliance, commended the legislators who voted in support of the legislation.

“I’m glad the Financial Services Committee today overwhelmingly chose to act and protect Americans, as well as preserve the fundamental freedoms of adults and the Internet,” said D’Amato. “This is a great day not only for poker players, but for proponents of Internet freedom and individual liberty.”

However, the PPA acknowledged the job was far from complete, urging poker players to continue to speak up on various political forums, including the Obama administration’s change.gov Citizen’s Briefing Book website, as well as the Republican’s America Speaking Out website.

Money is the next point of focus for the legislation.The next committee that will focus on poker-related legislation will likely be the Ways & Means Committee, where the attention will be on the taxing part of the equation. Rep. Jim McDermott (D-WA) has introduced companion legislation to Frank’s bill, which would impose an 8 percent tax on gambling operators, with 2 percent to the federal government and 6 percent to the corresponding states or tribes.

Wednesday’s mark-up and vote was not without its share of drama, as several last-minute amendments were added to the legislation. Amongst them was the prohibition of using credit cards to deposit onto sites, increasing the amount of time for states to be able to opt out of the legislation from 90 days to a full legislative session, requiring that technology be in place for loss limits, and banning sites who broke existing federal laws from being able to get a license under the new system.

That last amendment worried many online poker players, who wondered if the current U.S.-friendly sites that offer the game would now be banned if this legislation ever became law. Several sites, like PartyPoker, pulled out of the U.S. market after the UIGEA was passed in 2006. Other sites, like PokerStars and Full Tilt, stayed in the market, claiming they were breaking no laws by doing so. The UIGEA is in essence a banking law, and did not expand gambling in the states.

Click here to see a full list of the amendments proposed on Rep. Frank’s legislation.

In response to consumer concern, PokerStars released a statement that said it supported the legislation and the new amendment.

“The UIGEA, by its clear terms, shall not be construed as ‘altering, limiting or extending any Federal or State law or Tribal-State compact prohibiting, permitting, or regulating gambling within the United States,’” the statement read. “PokerStars supports the provisions in both [applicable] amendments as neither would adversely affect the availability of a license for a respected operator such as PokerStars. As reflected in legal opinions provided to PokerStars, its activities in the US are and at all times have been lawful.”

PokerStars also cited its success in working with various international governments, including that of France and Italy.

The Ways & Means Committee is about to go on a legislative break along with the rest of the House of Representatives, so the earliest that McDermott’s bill can be discussed will be in September.

 
 
 
 

Comments

bparmalee
over 10 years ago

I find it very intresting that some poker players that are aligned with internet poker sites support this legislation. If they ever do get an internet gaming bill passed they will most certainly lockout every current provider of online poker. MGM and Harrahs want to get into the marketplace and they will make sure they obtain a competitive balance. Party Poker will come back but Stars, Full Tilt and every other current provider will not be able to obtain whatever certification will be needed to operate in the new system. I guess the current pros figure they will be able to find a place with the new companies but not for the lucrative ownership stakes that some players have currently. I am looking forward to the furture of internet gaming because they will most liekly have a decent comping system and great tie ins with actual casinos. Plus there will be added accountability.

 
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Livinxl
over 10 years ago

Well said bparmalee.........the days of online cheaters would be over thats fine i will gladly pay taxes on my winnings when i know the site or the players arent rigged!

 
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rabo80134
over 10 years ago

You might want to check your enthusiasm, Livinxl. The taxes could be set up like an income tax. They would be taken when the site recognizes the income and that's when you deposit your money. Deposit $100 and your account balance becomes $92. I hope the tax is taken on the withdrawal but I doubt the tax agencies want to wait that long for fish like me that never get a chance to withdraw winnings. ;-)

Also, there's a lot to happen between now and the end of the session. There's a good chance the bill dies at the end of the session before it has a chance to be voted on. Let's keep our fingers crossed when they're not typing letters to our Congressmen.

 
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HappyBirthday
over 10 years ago

Thank you Barney Frank and the PPA for getting something passed. Hopefully all the dog doo doo that was piled on this bill can be removed.

I also wonder if Harrahs and Party Poker are behind the amendment to ban sites that broke federal laws. What if every company and individual were subject to a rule like that? Nobody would be in business.

Depending on the legal interpretation, PokerStars and FullTilt didn't break any federal laws, but PartyPoker definitely did when they added online blackjack. In the end the amendment hurts Party more than PokerStars and FullTilt.

 
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k9houses
over 10 years ago

I would have to disagree with respect to Party breaking any laws. Once the law went into effect, Party promptly stopped taking money from U.S. players. They have the eyes on the Bigger Picture... not the immediate dollar. In my opinion, the amendments hurt PS, FT, UB, etc., for non compliance and it's obvious. PS and FT are falling over each other with new methods of depositing money. If US banks were told to ban all deposits attempted at these sites, doesn't that speak volumes? The banks are complying... why cant PS and FT do the same?

Greed!

Anyway, I do hope the brick and mortar casinos are positioning themselves to hit the ground running. If I can earn the same rewards from the comfort of my home, GREAT! Saves me a 2 hour trip in either direction.

 
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bparmalee
over 10 years ago

@rabo I dont think there is a chance that you would be charged taxes on a deposit. I mean they cant make the assumption that you will win money. Any taxes will 100% be taken out upon withdrawl.

@happybirthday I think its more likely that Harrahs and MGM is behind the movement to get the current providers banned. Party Poker doesnt really have an active lobby base here in the states. This bill would be DOA if not for the support of the major casinos. I mean Harrahs can taste all of the cash they will make running sat's for the WSOP on their site and locking players into the main event months in advance. Plus by comping people rooms for play online they can push people twoards taking a vegas trip and dropping even more money in their casinos. Its going to be a short term bonanza for them.

 
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dare2
over 10 years ago

I'm soooooo relieved because we all know when the government gets involved everything turns out perfectly. (Is there a sarcasm button on this keyboard somewhere?)If this bill ever be comes law we will all cry for the good old days of internet poker as it stands now. If you think the present day operators of poker web sites cheat and scam wait until the professionals get both their hands in your pockets. They will make these present day grifters look like rank amateurs through ever increasing taxes and fees. Count on it.

 
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